Navigation

Troika skeptical on primary surplus

The troika has doubts about Greek projections for a primary surplus this year and next and has begun the process of discussing with Athens the contents of the 2014 budget, which Greece’s lenders believe contains several areas that need closer inspection.

High-ranking Finance Ministry sources said that while the representatives of the European Commission, European Central Bank and International Monetary Fund agree that Greece will produce a primary surplus at the end of the year, they think it will be minimal. The troika is also skeptical about Greek projections for a primary surplus of 1.5 percent of GDP at the end of next year.

It is thought that one of the reasons Greece’s lenders are downplaying the possibility of Athens producing a sizable surplus is that they are alarmed by the debate in Greece about how this amount will be allocated and whether social spending could be increased.

With regard to the 2014 budget, the troika still has doubts about the effectiveness, in terms of revenue raising, of the unified property tax. Next year will be the first time the levy, which combines several property taxes into one, is applied.

Troika officials are paying particular attention to the state of Greece’s tax administration, which will be key to whether the government can hit its revenue targets. Any lack of convergence with the revenue goals agreed with the troika would make further fiscal measures necessary.

Greece’s Finance Ministry also informed the troika that the government would not meet its target of paying off this year all of the 8 billion euros in arrears that it had amassed.